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Hardware Technology

Credit Crunch Squeezing Data Center Space 84

Posted by ScuttleMonkey
from the time-to-sublease-cycles-with-virtual-hosting dept.
miller60 writes "Many companies have saved money by leasing wholesale 'plug and play' data center space instead of building their own facilities. But the credit crunch has slowed the construction of new data centers, and analysts say this will create a shortage of data center space in 2010 in key markets like northern Virginia and Silicon Valley where demand exceeds supply. The situation is already becoming critical for companies with large space requirements, as indicated by a flurry of leasing recently in northern Virginia, where the remaining space may be quickly absorbed by government stimulus projects."
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Credit Crunch Squeezing Data Center Space

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  • Supply? Demand? (Score:5, Insightful)

    by chuck (477) on Friday May 29, 2009 @06:42PM (#28144975) Homepage

    As the supply of data center space dwindles, the price will go up. When it goes up enough, it will become profitable to build new data centers, and it will happen. It's the economy, people.

  • by causality (777677) on Friday May 29, 2009 @06:57PM (#28145125)

    We've been fighting to find decent data center space for a good while here in Tampa, FL. Level(3) keeps saying they cannot provide enough power to fully utilize their facilities (we read that as holding onto premium real estate for the high bidders) and other data centers we've looked into are either ludicrously expensive or force us to use their connections to the internet which we, as an ISP, really don't want to do.

    At what point then does it make sense to hire a data center with a fat pipe that's located on foreign soil? If domestic (USA) data center space is becoming a scarcer, and thus more expensive, resource and that point is reached sooner rather than later, wouldn't this represent yet more wealth being transferred out of this country? I don't know how large and significant this market is, but it sounds like one that is only going to become more significant as the need to store electronic data is only going to grow. The summary notes:

    The situation is already becoming critical for companies with large space requirements, as indicated by a flurry of leasing recently in northern Virginia, where the remaining space may be quickly absorbed by government stimulus projects

    Some stimulus indeed if it encourages wealth to leave this country. Now I am rather ignorant about economics. I can apply basic reasoning like this but I really don't know much about the topic and I freely admit that. Is there any likely way that this would not be the case?

  • Re:Supply? Demand? (Score:3, Insightful)

    by timeOday (582209) on Friday May 29, 2009 @07:00PM (#28145147)

    As the supply of data center space dwindles, the price will go up. When it goes up enough, it will become profitable to build new data centers, and it will happen. It's the economy, people.

    Yes, and knowing ahead of time what the economy is likely to do is the key to making money from it, which is something some people are very interested in.

  • Re:Supply? Demand? (Score:4, Insightful)

    by nganju (821034) on Friday May 29, 2009 @07:02PM (#28145169)
    It's already profitable. The credit crunch has quashed new centers from being built because the credit markets are frozen due to irrational fears, something the supply/demand model does not account for. When the space dwindles the new centers will be built but there's a lag, it's not instant, also something supply/demand models do not account for. Let's leave the Econ 101 classroom theory alone and take a look at the real world. http://en.wikipedia.org/wiki/Behavioral_economics [wikipedia.org]
  • by gelfling (6534) on Friday May 29, 2009 @07:03PM (#28145173) Homepage Journal

    There's more to the world than NOVA. Unless you have ITAR requirements for government work.

  • Re:Supply? Demand? (Score:5, Insightful)

    by icebike (68054) on Friday May 29, 2009 @07:05PM (#28145201)

    Temporary shortages of things like this are the ultimate Non-Story.

    If we want to really HoZe this industry, let the government step in. Otherwise will the hand wringers please shut up and sit down and let the market handle this!?

    Yes, financing may be tight, unless you are Google or Amazon, or Apple, or IBM, or Microsoft. But it it IS a problem you haven't built your business case very well. There are Venture Capitalists out there roaming around looking for ways to put their money to work, and infrastructure is a lot more reliable then next weeks "big thing" software project.

  • That can be very common when the rack density exceeds their cooling or power capacity. They'll have customers purchase empty space to offset that rack full of blade servers.

  • by Thelasko (1196535) on Friday May 29, 2009 @09:43PM (#28146307) Journal

    At what point then does it make sense to hire a data center with a fat pipe that's located on foreign soil?

    When latency doesn't matter.

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